There are many reasons why Barbados is regarded as a prime location for international banking activities. For several
years, international banking and financial houses have been drawn to Barbados as a result of its attractive tax
incentives, special exemptions, guarantees on future taxation, high quality of professional services and the reputation of Barbados as a reputable Offshore Banking Center.

Establishing An Offshore Bank

In order to establish an offshore bank in Barbados, details
of the proposed bank must first be submitted to the Central
Bank of Barbados for approval. Approval must be sought from
the Ministry of Finance prior to the incorporation of a company.
A company must have a license before engaging in the offshore
banking business. Applications for a license are submitted
to the Central Bank who may issue the license, subject to
the approval of the Minister of Finance. A license to operate
is issued only to qualified foreign banks and eligible companies.
Licenses are under the overall control and oversight of the
Central Bank of Barbados.

There is a minimum capital requirement of US $2 million for banks which accept 3rd party deposits and US $500,000 for those which do not. It is required that at least one of the directors be a Barbadian resident and that an annual shareholder meeting be held. The bank's accounting records, minutes and resolutions must be maintained at the local office. Offshore banks are subject to annual audits and license fees. Income tax is applied on a sliding scale of 2.5% - 0.25%.

The Offshore Banking Act provides that dividends, royalties,
interest, foreign securities funds, gains and assets generated
or managed by a licensee are automatically exempt from the
provisions of the Exchange Control Act.

Summary of Benefits

Tax at the rate of 0.25% (on profits over US$15 million),
up to 2.5% (profits up to US$5 million)